Leaving Your Illinois Home to Someone Without Probate: How a Transfer on Death Instrument Works

After 25 years in real estate, one of the hardest calls I get is from a family that just lost a parent and wants to know what happens to the house. Sometimes the answer is a trust. Sometimes it is probate court. And sometimes it is a one-page document most Chicago-area homeowners have never heard of: the Transfer on Death Instrument, or TODI.

What a TODI is

Illinois' Real Property Transfer on Death Instrument Act (755 ILCS 27) lets an owner name one or more beneficiaries who receive the owner's real property at the owner's death. It started out covering residential real estate, and since January 1, 2022 it covers real property more broadly.

Think of it like the "payable on death" designation on a bank account, but for your house, condo or two-flat.

What the law requires (and what voids it)

Under Sections 40 and 45 of the Act, a TODI must:

1. Contain the essential elements of a recordable deed (it does not need to state consideration or the beneficiaries' addresses)
2. State that the transfer happens at the owner's death
3. Be signed by the owner and attested by at least two credible witnesses, with the signatures acknowledged before a notary
4. Be recorded before the owner's death with the recorder in the county where the property sits

Miss any of those and the statute says the TODI is void. That last one is the heartbreaker: a TODI found in a desk drawer after someone passes does nothing. The Cook County Clerk's office says the same thing in plain words on its recording topics page.

One more trap: if a beneficiary (or their spouse) serves as one of the witnesses, that beneficiary's share can be void unless there are enough other qualified witnesses. Use independent witnesses.

The capacity needed to sign or revoke a TODI is the same as for a will, and the Act says an agent under a power of attorney cannot create or revoke one for the owner.

You still own your home

This is the part that surprises people. Under Section 60, while you are alive a TODI does not affect your right to sell, transfer or mortgage the property, and it does not give the beneficiary any legal or equitable interest. The beneficiary does not have to be told, does not have to accept, and does not pay anything.

Want to change your mind? A TODI is revocable, but only the right way. Under Section 55 you revoke it with a new TODI or a written revocation that is signed, witnessed and notarized the same way and recorded before your death. Tearing it up, or writing something different in your will, does not revoke a recorded TODI.

What happens at the owner's death

The property passes to the beneficiary named in the instrument, but it comes with everything attached. Section 65 says the beneficiary takes the property subject to mortgages, liens and other interests that exist at the owner's death, and without any warranty of title. If two or more beneficiaries are named, they take equal, undivided shares with no right of survivorship unless the instrument says otherwise.

A few other rules from the Act worth knowing:

• A beneficiary can file a notice of death affidavit with the county recorder to confirm title (Section 75), and can disclaim the property entirely (Section 80).
• A surviving spouse can renounce the TODI within 7 months after the owner's death unless that right was waived (Section 66).
• Creditor and certain other claims can still reach the property, similar to a revocable trust (Section 85).
• A challenge to the TODI must be filed within the earlier of 2 years after the owner's death or 6 months after letters of office are issued in probate (Section 90).

Inherited a house through a TODI and want to sell?

Before you list, talk to an Illinois real estate attorney about recording the acceptance and notice of death paperwork, paying off or assuming any mortgage, and how the title company will want to see the chain of title. Cook County's Clerk publishes TODI, revocation and acceptance/notice of death forms, lists a $59 recording fee for a TODI, and runs a free Legal Help Desk staffed by legal aid attorneys. Collar counties have their own recorder offices, so check with yours.

The Act also says a TODI should be prepared by a licensed attorney, although an owner preparing their own does not make it void. My advice: pay the attorney.

Bottom line

A TODI can move an Illinois home to the people you choose without probate, but only if it is signed, witnessed by two people, notarized and recorded while you are alive. It does not lock you in, it does not stop you from selling, and it does not wipe out the mortgage.

If you are selling a home you inherited, or getting ready to sell your own, I offer full service at a 1% commission. Call or text me at 312.882.9797.

This article is general information about the Illinois Real Property Transfer on Death Instrument Act, not legal advice. Talk to an Illinois attorney about your own property and estate plan.